In this episode of SaaS-Story in the Making, B2B SaaS Coach Matt Wolach sits with CEO and Founder of Strategyn, Tony Ulwick to talk about the importance of customer-defined metrics in product innovation. As one of the pioneers of the Jobs-to-be-Done theory, he shares important points on shifting mindsets in innovation, getting ahead of the problem, and how businesses can discover hidden opportunities along the way towards growth.
Podcast: SaaS-Story in the Making
Episode: Episode No. 210, “Fast Growth Through Better Knowledge of Your Customers”
Host: Matt Wolach, a B2B SaaS Sales Coach, Entrepreneur, and Investor
Guest: Tony Ulwick, Founder & CEO of Strategyn
TOP TIPS FROM THIS EPISODE
Define Your Market Correctly
Improving your product’s features may appear easy as you’re only going to go for what your market needs. However, it is still possible to not appeal at all, especially when you decided to use the wrong metrics at first. In this case, did you know your market and what they truly need from your product? Defining your market is what Ulwick considers to be the constant in the equation of your product innovation. It is a foundation of customer-centric development and its improvement. When you start the process right, everything else will fall into place.
Ulwick says that according to their research, 70% of product teams do not specifically define their market. In product building and innovation, this becomes a problem because of the uncertainty of the market’s needs. Companies cannot effectively employ the proper approach in scaling their product that would lead to a breakthrough for their customers. It also puts them at risk of losing time, resources, and efforts in only improving several parts of the products. Wherein they can do better if only there is a defined market. And the process ends up revolving around hypotheses on the market’s pain and how they build the product. As Ulwick described it, “As they’re iterating, the iterating on the market, the product and the value proposition simultaneously, it becomes this recursive process that makes it very difficult to exit because there’s no constant in the equation.”
Consider the Job Map
The Job Map is a tool to break down the job into steps. But it’s not the same with the process map. Ulwick differentiated it as the process map only lets you put what your customers are currently doing and lay it down into steps. The job map, on the other hand, lays out steps of the job to be done where you get ahead and try to foresee what they are trying to do.
The process and job map can be described as the solution space and the problem space respectively. In the former, you’re going to integrate something already existing on your product. Wherein, in the job map, you’re going into the problem space where the goal is to integrate what your customers’ goals are in using your product. An example Ulwick gave was about using the drill, where the solution space is to simply get the job done and drill holes. But when you shift to the problem space, you can create a more efficient and innovative response to achieve your customers’ purpose.
Understand the Three Categories of Customers
In product development, you have to know who the end-user will be. While it is important to gather your team, talk about how you can improve a product’s features, and brainstorm ideas on how to make it great. What matters most is how efficient it is for the market that will use it. However, as much as founders want to see a great product development on their end, it will still vary among its users. This is one of the most common struggles among businesses, especially in B2B companies. Ulwick defined three categories of customers that companies should consider in product development:
- Job Executors
They are the end-user. They are looking at the efficiency of the product and how its features get the job done. Being the end-user, their inputs matter when you want to improve your product according to their preferences.
They are in charge of how the product runs and its improvement–ensuring its efficiency for customers’ use. Approach them whenever you want customer experience improved.
They are looking at the financial and high-level performance lens of the product.
Identifying these groups allows you to set the right metrics and use ODi individually. This way, you are not operating on mere hypotheses of what they want and need. Instead, it gives you a clearer vision of the innovative actions that you’re going to employ. Hence, being able to develop your product by 15-20% better and become the winning product.
Jobs-To-Be-Done (JBTD) is a theory of consumer action. It revolves around the idea that there is a job to be done that motivates customers to acquire a product and adapt to innovation. In Ulwick’s story, he said, “it would have been great if we could figure out what metrics people were going to use to judge the value of our products” rather than relying on what they only think is the standard.
Before becoming a theory, Ulwick took inspiration from “we don’t want the quarter-inch drill, we want the quarter-inch hole” from 1962. There is an underlying factor that makes customers want to use the product, the JBTD. Looking through its lens, it moves you away from thinking like a company. Instead, it puts you in the position to think about your customer’s problem that you should solve. And in product innovation, you are no longer looking at your competitors to see how you will improve. You are now looking at the underlying problem of the market. And what they want to accomplish in using your product. At the end of the day, any product that can get the job done is considered a competitor.
Outcome-Driven Innovation Process (ODI)
The Outcome-Driven Innovation Process (ODI) is a strategy and innovation process backed by JTBD. Its goal is to make the innovation process more accessible and predictable. It is tied to the metrics on customers’ desired outcomes wherein you’re able to build or improve your product along with the metrics that customers are going to use to judge it. Therefore, giving you an insight into the outcomes so you can make a winning product.
This strategy gets businesses to understand the job at a granular level so they can address it step by step. It helps them unravel opportunities they can leverage to optimize product innovation and growth. You will never know how many “unmet needs” your market has. But when you find a way to get through each step, you can cater to a couple of needs at a time. Because one of the companies’ problems is only identifying one aspect at a time, then improving it, which makes growth slower than it should be. Ulwick said, “you may pick off one or two here or there and start making incremental improvements. But you never have the big breakthrough.”
ODI can help you get the job done by 15%, meet about 25 of your market’s needs, and have your big breakthrough. With this, you’re able to maximize your resources in a shorter time.
[06:06] “Necessity is the mother of invention.”
[07:49] “Instead of studying the product that people are using, let’s study what they’re trying to do with the product; let’s study the process.”
[14:32] “The unmet needs of today represent the breakthrough products of tomorrow.”
[16:02] “If you know where all people are struggling to get the job done, and there are 25 unmet needs that you could address to get the job done, better go address all 25 of them… don’t go out with incremental improvement.”
[09:54] “We’re trying to figure out, not how do we make the competitors’ products and make ours better, but how do we figure out what is the actual problem that they’re trying to solve?”
[19:33] “The users of the product might want something different than the CEO or the IT team, and they’re all looking at it in different ways.”
To learn more about Tony Ulwick and Strategyn, visit: https://strategyn.com/
You can also find Tony Ulwick on LinkedIn at: https://www.linkedin.com/in/tonyulwick/
For more about how host Matt Wolach helps software companies achieve maximum growth, visit https://mattwolach.com/.